Pair held in sponsorship scandal

By DANIEL LEBLANC, CAMPBELL CLARK and INGRID PERITZ
From Tuesday's Globe and Mail

The RCMP laid 12 charges of fraud yesterday against retired bureaucrat
Chuck Guite and the president of a Liberal-friendly advertising firm,
fuelling a firestorm in Ottawa over today's expected shutdown of the
parliamentary inquiry into the sponsorship scandal.

Mr. Guite and Jean Brault, the president of Groupaction Marketing Inc.,
each face six fraud-related charges concerning alleged offences between
1996 and 1999 that carry a maximum sentence of 60 years in jail.

The RCMP allege that Mr. Guite awarded five fake or inflated contracts
worth a total of about $2-million to Mr. Brault.

Three of the charges against each man are related to three reports for
which Groupaction received $1.6-million but allegedly provided less than
$468,000 in value to the government.

Two more charges against each allege that Groupaction provided no value to
the government in relation to two contracts worth a total of $480,000 as
part of Ottawa's gun-registry program. The final charge against each man
alleges that that Mr. Guite and Mr. Brault "conspired" to award a
bogus contract worth $330,000 to Groupaction.

Mr. Brault, 51, and Mr. Guite, 60, each pleaded not guilty. They were
released on $20,000 bail. Mr. Guit donned his familiar cowboy hat as he
left the courtroom.

The RCMP said the charges are "one facet" of a massive and
ongoing investigation into the sponsorship program, which was launched in
2002 after a series of stories in The Globe and Mail.

"We're going step by step, and turning almost every stone we can, to
make the best investigation possible," RCMP spokesman Corporal Patrice
Gelinas said.

While applauding the charges, the opposition attacked the Liberal
government for the imminent end of the parliamentary inquiry into the
scandal, saying the issue of whether Mr. Guite had political direction
remains unsolved.

The Liberals are moving a motion today to stop the hearing of witnesses at
the inquiry and to start drafting an interim report. The opposition said
that this is a clear Liberal attempt to cover up the mess and minimize the
political fallout in time for a spring election.

In Question Period, Conservative MP Jason Kenney accused the Liberals of
"jamming out an interim report this week and shutting down the
committee before it has heard from 90 witnesses because they do not want
Canadians to know the truth about where the millions went before we go to
an election."

The opposition has long said Mr. Guite was a "pawn" who fulfilled
the wishes of his political bosses by funnelling lucrative contracts to
generous Liberal donors such as Groupaction.

"Now we have charges being laid on the small fish. Who are the big
fish? What were they doing, and who is trying to cover this up?"
Conservative MP John Williams said.

Prime Minister Paul Martin refused to comment on the arrests.

"You know more about it than I do," Mr. Martin told reporters
after a speech in Montreal.

In the House of Commons, Public Works Minister Stephen Owen denied that the
government is inactive, saying it will soon file lawsuits to recover
misappropriated sponsorship funds.

Deputy Prime Minister Anne McLellan said the Liberals simply want Canadians
to have a report detailing what the parliamentary inquiry has learned.

"The public accounts committee is not being shut down. In fact,
members of the public accounts committee, as I understand it, have called
for an interim report," she said in the House.

Speaking in Montreal, Privy Council President Denis Coderre said Canadians
will rule on Ottawa's response to the scandal, which included the creation
of a public inquiry that will start hearings in September.

"It's not just a matter of what's going on today. It's also a matter
of what we've witnessed at public accounts. You know, we took the bull by
the horns. And listen, the people will judge," Mr. Coderre said.

The Liberals were attacked after their Quebec lieutenant, Jean Lapierre,
recently called for charges in the scandal to ease the anger over it in
Quebec.

Conservative Leader Stephen Harper said that Mr. Lapierre's statement
tainted the process.

"It just seems to me that the timing is suspicious," Mr. Harper
said, pointing to the coming election.

In an interview, Mr. Lapierre said that he did not interfere with the
RCMP's work and that "justice is following its course."

At a news conference yesterday, the RCMP said political interference was
not a factor in the charges.

Cpl. Glinas called for tips from people who dealt with Groupaction on some
of its 500 sponsorship deals.

The police force laid 18 charges of fraud last year against Paul Coffin,
head of Communication Coffin, for allegedly submitting $2-million in fake
invoices as part of the sponsorship program.

Another firm that worked on the program, Lafleur Communication and
Marketing, is under investigation.

Groupaction came under the RCMP's microscope in 2002 after The Globe
revealed that a report for which the firm had received $550,000 could not
be found.

The government asked the Auditor-General to probe that contract and two
similar ones. The Auditor-General concluded that Mr. Guite had "broken
just about every rule in the book" in managing the contracts worth
$1.6-million, and referred the matter to police.

Three of the six charges against Mr. Brault and Mr. Guite are directly
related to those contracts; the others are related to two allegedly fake or
inflated contracts for work on the federal gun registry.

Mr. Guite has always defended his awarding of the $1.6-million in the three
contracts to Groupaction, saying he also received "verbal advice"
as part of the deals.

Mr. Guite ran the $50-million-a-year sponsorship program between 1996 and
1999. The inquiry heard last month that he distributed the funds in
consultation with the offices of former prime minister Jean Chretien and
former public works minister Alfonso Gagliano.


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